Electric car charging station project in limbo

FBI said to be looking into 350Green's project for drivers of electric vehicles in Chicago, 19 other markets

April 11, 2013|By Julie Wernau, Chicago Tribune reporter

About 169 of the 280 charging stations 350Green promised to have in place by the end of 2011 in the Chicago area have been installed. Most of those are operational. (Michael Tercha, Chicago Tribune)

Three years ago, a Los Angeles firm named 350Green was picked to build a large network of charging stations for electric vehicles in the Chicago area. Other contracts soon followed in Ohio, Pennsylvania, Utah, California and Kansas.

The project, which put Chicago on the map as an early adopter of electric car technology, is now in limbo, with 350Green soon to be replaced by another company amid evidence of unpaid bills and accounting issues. Several hundred charging stations were supposed to have been installed by 350Green before the end of 2011, but work stopped some time ago, the company said. Projects by the company in 19 other markets also have been halted.

Two Chicago-area contractors working on the project, and others with direct knowledge of the situation, told the Tribune the FBI has been examining the 350Green project. The status of the investigation isn't clear. The FBI declined to comment.

Hundreds of pages of documents obtained by the Tribune under the Freedom of Information Act show that 350Green submitted copies of checks to the city in order to receive state and federal grant money.

The checks show contractors were paid. But three contractors contacted by the Tribune said they hadn't received those checks and had been paid only a portion of what they were owed overall. In the hope of getting reimbursed, some have filed liens against retailers that agreed to host charging stations.

Tim Mason, 350Green's president and co-founder, acknowledged Wednesday there were "clerical errors that took place. Those people involved there who were doing the invoicing and billing are not with the company anymore," he said, declining to identify the former employees.

Asked about FBI interest in 350Green, Mason acknowledged being contacted by investigators, but he would not identify the agency involved.

Peter Scales, a spokesman for the Chicago Department of Transportation, said in a statement that the department "discovered discrepancies in vendor payments after contracting with 350Green to install, own and operate electric vehicle charging stations in Chicago. We immediately notified the City's Inspector General and the appropriate authorities and are cooperating fully with those agencies and their investigations."

City officials declined to comment further.

Mason said JNS Holdings Corp., an electrical contractor in Arlington Heights that has worked extensively on the charging station installations, is expected to take over 350Green's role. A deal is being worked out between 350Green and JNS that would pay contractors about 50 cents on the dollar they are owed, according to contractors who have received a draft agreement from JNS.

Brian Howe, chief executive of JNS, said: "We are going to pay everybody what we need to get whole and move forward."

The city of Chicago has no money in the project. It acted as the administrator of about $2 million in state and federal grants awarded to 350Green. In this role, the city parceled out that money after 350Green submitted copies of checks that showed it had paid contractors. Less than $200,000 in grant money remains, according to city documents.

A copy of one of the largest checks submitted to the city, for about $1.9 million, was crucial to 350Green getting access to half its grant money, or about $900,000. That check, a Tribune review found, was written to a company affiliated with 350Green co-founder and Chief Executive Mariana Gerzanych.

Gerzanych didn't return phone calls Wednesday.

The $1.9 million check was written to a company called Actium Power, which described itself on its invoice as the "exclusive North American dealer" for Efacec USA, maker of fast-charging stations. An Efacec executive, Mike Anderson, told the Tribune that Efacec has no exclusive dealers and has had no dealings with Actium Power. The prices listed on paperwork provided to the city by 350Green were about double what Efacec charges, Anderson said.

The Web domain for Actium Power is registered under Gerzanych's name. Gerzanych tweeted in September 2011 that she created a new company by that name.

In April 2012, the city issued 350Green a "notice not to proceed" order on the project when it learned from contractors that 350Green wasn't paying its bills and, two months later, it issued a notice of default.

About 169 of the 280 charging stations 350Green promised to have in place by the end of 2011 have been installed. Most of those are operational, but in some cases retailers on whose properties the charging stations are located have switched off power. In other instances, according to contractors, the charging stations are not working because of technical problems.

For 350Green, the Chicago project helped launch the company and Chicago as a charging station leader. The project called for more places to charge an electric vehicle in 30 minutes than anywhere else in the country. Ford and Nissan moved up the rollout of their electric cars to the Chicago market because of the 350Green project.